Nornickel Gmk · RUS:GMKN
Nornickel Gmk — Nornickel — FY2022 Earnings Presentation
48 slides from Nornickel Gmk's earnings presentation, February 2023
Slide 1: 2022 Financial Results Investor Presentation
2022 Financial Results Investor Presentation February 2023
Slide 2: Disclaimer
Norilsk Nickel 2022 Financial Results Presentation Disclaimer The information contained herein has been prepared using information available to PJSC MMC Norilsk Nickel (“Norilsk Nickel” or “Nornickel” or “NN”) at the time of preparation of the presentation. External or other factors may have impacte
Slide 3: 2022 Financial Performance Highlights
Norilsk Nickel 2022 Financial Results Presentation | Financial Results 2022 Financial Performance Highlights Revenue Return to full production capacity after temporary FCF Repayment of environmental damages in 2021 suspension in 2021 Higher CAPEX Higher realized prices (Ni and Co) $16.9 bn Lower sal
Slide 4: Sustainable Development Update
Sustainable Development Update
Slide 5: Selected Environmental and Climate Change Goals
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Selected Environmental and Climate Change Goals Climate change Biodiversity Reduction of absolute volumes of Achieving a neutral net GHG emissions positive impact Air Land Implementation of the Sulfur Project Annual
Slide 6: 2022 ESG Update
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update 2022 ESG Update 2021 2022 2022 2023 Цель Факт План Ожид План к 2030 9.1 Increase of renewable 8.5 8.6 energy share3 Climate Mt of Weather factors Absolute Emissions Change (Scope 1&2 GHG)1 CO2-eq. pa (lower temperatu
Slide 7: 2022 Sustainable Development Performance Highlights
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update 2022 Sustainable Development Performance Highlights Environment & Corporate Social Climate Change Governance • Reduce SO2 emissions at Norilsk • Social strategy developed • New annual KPIs introduced Division: launch
Slide 8: Health and Safety Update
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Health and Safety Update Accident Statistics • In 2022 the number of lost time injuries increased [Employees] (from 42 to 66) due to improvement of the reporting transparency and injuries data collection • Regretfull
Slide 9: Environmental Program: Reduction of SO2 Emissions Progress
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Environmental Program: Reduction of SO2 Emissions Progress Nornickel’s target – achieve industry-benchmark for SO2 emissions reduction rate Kola Division: Norilsk Division: SO2 emissions were cut 90% Sulphur Project
Slide 10: Sulphur Programme 2.0: Environmental Roadmap
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Sulphur Programme 2.0: Environmental Roadmap Kola Division Norilsk Division 2020 2021 2016 Phase 1 Phase 2 Optimization of smelting Complete shut-down of the Large-scale sustainability- Launch of Sulphur Launch of Su
Slide 11: Sulphur Programme 2.0: Norilsk Division
Sulphur Programme 2.0: Norilsk Division Nadezhda Smelter (Phase 1): Flagship Project Construction of furnace gases capturing, sulfuric acid neutralization line and supporting infrastructure: • Over 90% of technological equipment delivered • Construction and installation works are 50% completed • Ins
Slide 12: Sulphur Programme 2.0 at Nadezhda Smelter
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Sulphur Programme 2.0 at Nadezhda Smelter Construction progress as of December 2022 Source: Company data 12
Slide 13: Physical Risks Assessment: Climate Change Scenarios until 2050
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Physical Risks Assessment: Nornickel Climate Change Scenarios until 2050 • Three global climate change scenarios (SSP1-2.6, SSP2- 4.5 and SSP5-8.5) have been selected and localized to the Norilsk Industrial District
Slide 14: Transition Risks Assessment: Global Economic and Climate Scenarios until 2050
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Transition Risks Assessment: Nornickel Global Economic and Climate Change Scenarios until 20501 Rapid Transition Sustainable Palladium Global Growth (SSP1-2.6) (SSP2-4.5) (SSP5-8.5) Probability: 25% Probability: 70%
Slide 15: Monitoring of Buildings and Structures in Norilsk Industrial District
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Monitoring of Buildings and Structures in the Norilsk Industrial District: a Practical Tool to Manage Climate Risks • In 2020–2021, satellite monitoring of physical assets located in 4 priority areas: Norilsk, Dudink
Slide 16: Clean-up and Collection of Legacy Waste in Norilsk
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Clean-up and Collection of Legacy Waste in Norisk Legacy Waste Collection and Land Reclamation Programme Before in Norilsk Area • The programs includes demolition of old abandoned buildings and structures, pipelines,
Slide 17: Large-Scale Biodiversity Study across the Company's Footprint
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Large-Scale Biodiversity Study across the Company’s Footprint In 2022, Nornickel and the Siberian Branch of the Russian Academy of Sciences conducted a large- scale biodiversity study at four Company divisions and lo
Slide 18: Markets Update
ba Markets Update
Slide 19: Metal Markets: Outlook on Medium-Term Fundamentals
6 Norilsk Nickel 2022 Financial Results Presentation | Markets Update Metal Markets: Outlook on Medium-Term Fundamentals Metal Ni Cu Pd Pt -131kt -89 koz -565 koz -49 kt Global Stocks, Bonded1 [days of [6] [4] [22] [20] [187] [157] consumption] [14] ETF1 ETF1 Exchange1 [7] Exchange1 Dec’21 Dec’22 De
Slide 20: Ni Demand: Robust EV Sales and Recovery of Stainless Steel Output
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Ni Demand: Robust EV Sales and Recovery of the Stainless Steel Output Stainless Steel (65% of Total Nickel Use): Batteries for xEVs (15% of Total Nickel Use)1: Recovery of Ni-Containing 300 Series Production Sales in 2022 – 9m Units
Slide 21: Ni Production: Growing Output of Low-Grade High-CO2 Metal
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Ni Production: Growing Output of Low-Grade High-CO2 Metal High-Grade Nickel Production: Nickel Chemicals for the EV Sector – the Key Driver of High-Grade Supply Growth • 2022: recovery of Class 1 Ni production following temporary [k
Slide 22: Ni Market Balance: Surplus of Low-Grade Nickel
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Ni Market Balance: Surplus of Low-Grade Nickel (Class-2), High-Grade Market Balanced (Class-1) Surplus in 2022-2023E Concentrated in Low-Grade Nickel Demand is Driven by the Battery Sector Nickel (Class-2) for EVs [kt Ni] [kt Ni] [Y
Slide 23: Cu Market: Demand Growth in China Balanced by New Capacity
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Cu Market: Demand Growth in China Is Balanced by the Launch of New Mining Capacities and Increased Refinery Throughput Consumption: The Main Growth Driver Is Balance: Deficit Persists in 2023 Amid Protests Domestic Demand in China i
Slide 24: Low Levels of Stocks in China and Risk of Mine Disruptions
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Low Levels of Stocks in China, as Well as the Risk of Mine Disruptions Create Favorable Conditions for Copper Price Possibility of Continued High Levels of Supply Global Exchange Stocks at the End of 2022 Were at Disruptions in 2023
Slide 25: Post-pandemic Recovery of the Automotive Market in 2023-2024
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Post-pandemic Recovery of the Automotive Market in 2023-2024 Global Auto Sales in 2022 Fell By 0.6% YoY to Global Auto Production: Slower Recovery in 81 Million Units 2023-2024 than Expected [million units] Chip shortage (especially
Slide 26: Pd Market: Deficit Persists as Primary Production Declines
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Pd Market: Deficit Persists as Primary Production Declines and Despite Delayed Demand Recovery Consumption: Slower Recovery in ICE-powered Market Balance1: Deficit Persists Amid Metal Output Vehicle Production, Pd with Pt substituti
Slide 27: Pt Market: Surplus Shrinks as South African Supply Declines
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Pt Market: Surplus Shrinks as South African Primary Production And Recycling Declines, While Consumption Is Stable Consumption: Growth in the Auto Industry due to Market Balance1: Surplus Narrows amid Pd/Pt Substitution in Autocatal
Slide 28: Metal Markets: Outlook on Long-Term Fundamentals
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Metal Markets: Outlook on Long-Term Fundamentals Metal Ni Cu Pd Pt Market Balance Deficit Deficit Surplus Deficit Forecast +6% +2% +3% +1% Supply (CAGR, %) 2020 2030E 2020 2030E 2020 2030E 2020 2030E Africa Russia Africa Russia Low-
Slide 29: Financial Update
Financial Update
Slide 30: Consolidated Metal Revenue Decreased by 6%
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Consolidated Metal Revenue Decreased by 6% Consolidated Metal Revenue Dynamics: Impact of Geographical Breakdown of Sales Macro Factors [% of USD sales] [USD mln] 53% 47% 5% 7% Macro factors Company performance Russia and CIS (15
Slide 31: EBITDA under the Impact of Macro Factors and Higher Costs
Norilsk Nickel 2022 Financial Results Presentation | Financial Results EBITDA under the Impact of Macro Factors, Decrease in Sales Volume, Increase of Labour and Repairs Expenses EBITDA margin [USD mln] 53% 58% 59% 52% EBITDA 49% EBITDA margin 8,697 6,231 10,512 7,923 7,651 2018 2019 2020 2021 2022
Slide 32: Cash Operating Costs under Impact of Inflation and RUB Appreciation
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Cash Operating Costs under the Impact of Inflation, Appreciation of RUB against USD and MET Pressure Cash Costs Dynamics [USD mln] Russian macro factors One-off factor Operating factors +719 +77 +871 280 6,541 359 443 446 77 4,87
Slide 33: Growth of Net Working Capital under Russian Macro Factors
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Growth of Net Working Capital under the Influence of Russian Macro Factors [USD mln] Russian macro factors Effect of restrictions imposed on Operating factors -166 Russia +2,405 +495 478 17 4,003 1,101 107 1,197 1,269 171 106 (21
Slide 34: Capital Investments Growth in Accordance with Strategic Priorities
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Capital Investments Growth in Accordance with Strategic Priorities CAPEX1 Breakdown by Projects CAPEX1 Allocation by Type [USD mln] 4,298 [USD mln] 4,298 Environmental program (Sulphur 893 programme in Norilsk - Phase 1) Environm
Slide 35: Free Cash Flow Decrease under Macro Factors and CAPEX Growth
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Free Cash Flow Decrease under the Impact of Macro Factors and CAPEX Growth [USD mln] 4,404 1,968 1,084 (2,581) 22 437 (2,926) (1,534) 2021 Lower EBITDA Repayment of Higher net Lower income tax Higher Other 2022 environmental work
Slide 36: Liquidity and Debt Management: Adjusting to New External Factors
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Liquidity and Debt Management: Adjusting to New External Factors Leverage Sustained at Manageable Levels Liquidity and Debt Repayment Schedule [USD bn] Gross debt Cash 28 [USD bn] Net Debt/ Committed 3.3 EBITDA (х) credit lines &
Slide 37: 2022 Highlights - Liquidity and Debt Management
Norilsk Nickel 2022 Financial Results Presentation | Financial Results 2022 Highlights - Liquidity and Debt Management Key deals of 2022 • The portfolio of committed credit lines expanded by RUB 60 bn, credit limits under treasury credit lines by RUB 15 bn. In addition to that, the Company signed 2
Slide 38: Financial Results Sensitivity to USD/RUB Exchange Rate
Norilsk Nickel 2022 Financial Results Presentation | Financial Results Financial Results Sensitivity to USD/RUB Exchange Rate At USD/RUB rate of 70.34, 1% change in OPEX Break Up by Currency1 exchange rate translates into EBITDA change of 9% 6% USD63.1 mln, FCF change of USD99.6 mln [USD mln] [USD/R
Slide 39: Operations and Strategy Update
Operations and Strategy Update
Slide 40: 2023 Production Guidance Upgrade
Norilsk Nickel 2022 Financial Results Presentation | Operations and Strategy Update 2023 Production Guidance Upgrade Ni Platinum Group Metals Cu [kt] [moz] [kt] 233 Pd Bystrinsky (Chita Copper project)2 217 204-214 Pt 219 190 63 21 67 64-68 68 0.7 0.7 0.7 0.6 0.6-0.7 436 424 339 366 353- 373 2.8 2.8
Slide 41: 2023 Capex – Peak of Investment Cycle
Norilsk Nickel 2022 Financial Results Presentation | Operations and Strategy Update 2023 Capex – Peak of Investment Cycle Capex [$ bn] 4.7 4.3 2.8 Mid-to-long term guidance is currently ~1.7 under review 2013-2022 2021 2022 2023E Mid-to-long time guidance Capex guidance will be subject to a number o
Slide 42: Appendix
Appendix
Slide 43: "Best in class" Commodity Basket
Norilsk Nickel 2022 Financial Results Presentation | Markets Update "Best in class" Commodity Basket The use of cobalt in batteries and rhodium in Transport electrification and energy more environmentally friendly storage implementation vehicles with ICE Increasing demand for stainless steel, Hydrog
Slide 44: Key Factors Affecting Change in Demand for Main Products
Norilsk Nickel 2022 Financial Results Presentation | Markets Update Key Factors Affecting The Change In Demand For The Company's Main Products Ni Pd/Pt Cu Growth of market share of BEVs Growth of hybrids Fuel cells, hydrogen economy Growth of renewables/ low carbon fuel in power generation Storage a
Slide 45: Social Strategy: From Sponsoring to Joint Development Programmes
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Social Strategy: From Sponsoring to Joint Development Programmes • Actively implementing a five-year RUB 2 billion programme to support the indigenous peoples of the North on the Taimyr Peninsula • Running projects t
Slide 46: Biodiversity Conservation across the Company's Footprint
Norilsk Nickel 2022 Financial Results Presentation | Sustainable Development Update Biodiversity Conservation: Conserving Biodiversity of Ecosystems across the Company’s Footprint Nornickel recognises the importance of conserving biodiversity • A pivotal biodiversity study: run as part of the Great
Slide 47: Contact details
Contact details Mikhail Borovikov Head of Investor Relations Department E-mail: IR@nornik.ru
Slide 48: Thanks for attention!
Thanks for attention!